The collapse of Pattisons’ Whisky
During the latter months of 1898, Pattisons’ Whisky, an established blending and distilling business based in Leith, Edinburgh announced record profits. In addition, the company agreed to the expansion of the Aultmore and Glenfarclas distilleries in which they had substantial shares. Today both still operate in Speyside, one of Scotland’s five Scotch Whisky Regions.
Despite this declaration of profitability, the writing was almost certainly on the wall for the company. It owed the Distillers Company Limited (DCL) money, and many of the banks had withdrawn support.
Within weeks the company was bankrupt and the wider Scotch whisky industry entered a long period of decline – the late Victorian Whisky Bubble had burst.
The subsequent investigation by receivers into the firm’s collapse revealed a raft of greed, fraud and false reporting. The books, for example, showed a difference of half a million pounds between actual and stated assets.
They also discovered the company had vatted large quantities of poor quality whisky while labelling it a “Glenlivet blend” not necessarily to defraud the public but more likely to inflate the valuation.
“Corporate maleficence” said Dr Paul Kosmetatos, an economic history specialist from the University of Edinburgh. The National Library of Scotland called the debacle, “Shady dealings in the whisky underworld.”
Who were the Pattisons?
The Pattison family began business life as an Edinburgh dairy wholesaler before brothers Robert and Walter Pattison took control of the company from their father.
Robert, Walter and one-time partner Alexander Elder (there are few details of Elder’s role) ran the business from impressive offices in Leith’s Constitution Street. Diversifying into blending and marketing their own whisky, they sought to take advantage of increasing demand for the product. Royal Gordon and Morning Dew were two of the company’s best-known brands.
Their subsequent growth, culminating in the floatation of the company on the London Stock Exchange, can only be described as meteoric. Receiving around £150,000 from the floatation in 1896, the brothers, now operating as Pattisons Ltd, began spending – business and pleasure.
Although they also acquired a number of Edinburgh townhouses the family had a grand country home at Clovenfords in the Scottish Borders. The brothers often commuted to the capital by private train, one of the many signs of ostentatious living. PR savvy as always, they made sure the press was on hand to note their journey.
19th Century Scotch whisky industry
The Pattisons chose the right time to move from dairy to whisky, for the 1890s were good years for the Scotch whisky industry. The banks were providing easy credit and the Pattisons unsurprisingly wanted to take advantage.
Increases in production and consumption of Scotch were partially driven by the near collapse of the French wine and brandy industry during the latter half of the century as the phylloxera beetle ravaged the country’s vineyards. An unwelcome visitor from the United States according to the Smithsonian Magazine. The Great French Wine Blight saw drinkers, unable to get their favourite tipple, particularly in England, turn to Scotch whisky as their spirit of choice.
While the final years of the century were a time of growth and innovation there were other notable events spread throughout the century which played their part in the development of the industry. It’s worth pausing for a moment to consider a few of them.
High on the list is the remarkable Aeneas Coffey’s invention of the continuous still, patented in 1830. This design masterpiece became the standard for the production of grain whisky.
In any history of Scotch whisky in the 19th century, however brief, it’s impossible not to mention Charles Doig the distinguished distillery architect and engineer who was so involved in the rush to expand and modernise.
Construction of over 30 distilleries took place during the 1890s, with the majority in Speyside. Among them Balvenie Distillery founded by William Grant of Glenfiddich in 1892 and the Longmorn-Glenlivet Distillery built in 1894. The expansion of the railway throughout the country, which improved the distribution network, was also a major part of the success story.
Edinburgh’s place in the story of Scotch whisky
That the Pattisons picked Leith as their corporate base is perhaps a reminder for those with an interest in the industry, that Edinburgh today part of the Lowland Scotch Whisky Region, was once a major player in the ‘Scotch whisky business’.
Ballantines, for example, has its origins in the city, as does the Scotch Whisky Association which began life as the Edinburgh and Leith Wholesale and Spirit Association. Today the Holyrood Distillery which opened in July 2019 and the new Port of Leith Distillery, which at this time of writing is a work in progress, are signs of a re-emerging influence of whisky related businesses in the capital.
Inspirational marketing or sleight of hand?
Even a cursory scan of current distillery advertising shows the creative marketing hand at work. The Pattisons however were marketers of a different ilk. Aggressive and innovative – yes – but also well aware of the benefits of tapping into the prevailing sense of nationalism.
In what one commentator called an age of, “flamboyant entrepreneurship”, the Pattisons’ advertising posters often had military themes and slogans – Pattisons’ Whisky: going great guns and Pattisons’ Whisky: Gordon avenged, a reference to the killing of General Gordon during his defence of Khartoum.
Mirrors, glasses, dispensers and a myriad of other marketing paraphernalia, were also widely dispersed to pub landlords.
But the most extraordinary, if somewhat bizarre, of all the marketing campaigns involved 500 West African Grey parrots and the accompanying advertising slogan of Pattisons’ Whisky: speaks for itself.
The parrots taught to repeat the message “buy Pattisons’ whisky” were distributed to pubs around Britain.
Pattison brothers jailed for fraud
There was a certain inevitability to the final chapter of the Pattison story when the brothers were convicted of fraud at Edinburgh’s High Court in 1901. Robert received a jail sentence of 18 months while Walter lost his liberty for nine months. Both served their time in Perth Prison.
While it’s likely the whisky industry would have collapsed with or without the Pattisons, the brothers’ involvement did play a direct part in bringing down a number of distilleries and other ancillary businesses alongside their own company.